Market Summary

Yield Movements

Local currency government bond yields in Malaysia fell for all tenors between 1 June and 30 August on expectations of policy rate cuts by the United States Federal Reserve. On 11 July, Bank Negara Malaysia held its policy rate steady at 3.50% amid stable inflation and sustained economic growth.

Local Currency Bond Market Size and Issuance

Malaysia's local currency bond market reached a size of MYR2.1 trillion at the end of June on 0.9% quarter-on-quarter (q-o-q) growth. Government bond market grew 1.6% q-o-q in the second quarter of 2024, driven by increased issuance of Treasury bills. Meanwhile, corporate bonds outstanding rose 1.3% q-o-q in the second quarter of 2024 due to a rebound in issuance during the quarter. Sukuk (Islamic bonds) continued to comprise a majority of the total local currency bond market at the end of June with a share of 63.4%.

Sustainable Bond Market

Malaysia's sustainable bond market reached USD14.2 billion at the end of June on 3.5% q-o-q growth. Sustainability bonds comprised almost three-fourths of the sustainable bond market, with green bonds the next most common type. A majority of sustainable bonds outstanding were issued by private corporations and carried maturities of more than 5 years, while sustainable bonds issued by the government were also only longer-term securities.